We have all quickly become accustomed to enjoying and relying on the conveniences of technology. My smart phone tells me the weather and the news, keeps me current on email, connected with my friends on social media, and can summon an Uber ride at the click of a button. How did we ever live without being connected 24/7? I was at a dinner over the weekend and a debate ensued over the name of the plant in the table arrangement. My wife whipped out her smartphone, clicked open an App called “Leafsnap” and instantly settled the debate.
While it’s handy to be able to lock my home remotely and view my property remotely from a webcam, broadband connectivity also promises to solve some serious macro issues such as the environmental challenges of urbanization. “Smart Cities” are at the forefront of this evolution. By leveraging emerging information and communications technology (ICT), these cities are seeing population growth attributed to the resulting increase in economic activity, improved transportation efficiency and an overall enhanced quality of life for its citizens. That is, the efficiency gains enable the creation of environmentally friendly mega cities that are capable of safely increasing population density in a sustainable manner. In short, people will flock to these large Smart Cities for high quality jobs, innovation and economic prosperity. …Or will they? While the concept of Smart Cities is highly reliant on greater broadband connectivity, my observation is that as connectivity becomes more pervasive, the less people are drawn to big cities. Hence the Smart City paradox.
What is a Smart City?
There are a number of definitions of a Smart City but they typically involve 6 main components:
- Economic Development
- A Sustainable Improved Environment
- Education Infrastructure Modernization
- Quality of Life (creative culture, safety, security, efficiency)
A combination of factors led to the concept of Smart Cities which foresees the implementation of Gigabit broadband connectivity as a solution to many of the current urban problems. This would be achieved by increasing economic activity – thereby reducing intercity poverty – a reduction in crime via improved surveillance and faster police response, less traffic as a result of telecommuting and online schooling, and increased reliance on public transportation, which also alleviates concerns over rising levels of greenhouse gases. These mega-cities see the opportunity to leverage emerging information and communications technology (ICT) to address further urbanization growth. All of the productivity gains enable the creation of an environmentally friendly city that is capable of safely increasing its population density in a sustainable manner.
In 2011, Google launched Google Fiber which proved to be a highly successful disruptive event that has spurred the Gigabit broadband race across America. Just like we witness with a CVS going across the street from every Walgreens, the “NFL cities” have been blanketed with Gigabit service announcements and deployments from the Tier 1 Telcos and Multiple Systems Operators (MSOs). Rural Co-ops have been leveraging Federal funds to deploy Fiber-To-The-Premise (FTTP) for years. This leaves the bulk of America at risk of being left behind. These are communities too small for Google Fiber consideration (and the matching Gigabit broadband deployments by the Tier 1s) and too big to be eligible for Federal broadband subsidies. As a result, these communities have been taking matters into their own hands to work with local and regional operators to transform their towns into Gigabit Communities.
These Gigabit Communities range from former textile towns such as Rock Hill, SC to a former cotton community such as Jackson, TN to dairy farms in Northwest Indiana to rural Mississippi. By the end of 2015, over 200 communities across the country will become “Gigabit Communities.” Without Gigabit broadband initiatives, these towns were at risk of losing the next generation to bigger cities. However the launch of Gigabit services in their communities has been the key catalyst for economic growth and development. A FTTH Council study of 14 communities with Gigabit deployed found a direct positive impact of 1.1 points on GDP (Gross Domestic Product) growth over similar communities. For those non-economists, GDP growth rate of around 2% is considered flat (like treading water). Communities with a 2-4% GDP growth rate are healthy and robust, so imagine what a 1.1% increase in GDP can mean for a community’s overall economic picture.
While communities enjoy the boost in their local economy, their citizens also see an immediate benefit in their home values. The FTTH Council commissioned a recent study with the University of Colorado at Boulder which found that Gigabit services increases home values by 3.1%. On a $175,000 home, this Gigabit effect increases the homeowner’s equity by nearly $5,500 or about the same as adding a fireplace or half the value of adding a bathroom.
The Smart City Paradox
While a Gigabit services infrastructure is paramount for Smart Cities to gain the necessary efficiencies to increase their population densities for urbanization while reducing environmental impact, Gigabit Communities have become a magnet for high tech workers, their employers and entrepreneurs. It turns out there no longer needs to be a tradeoff between quality of life and proximity to high paying jobs. Gigabit broadband puts it all within reach. As the innovative jet set move to these smaller towns, their suppliers follow along with hotels, restaurants, retail and other industries that seek growth opportunities.
As a result, the more Gigabit infrastructure that is deployed across the country, the more urban dwellers will realize the work/life benefits of living in the “smart” communities outside of the big cities.